Tuesday night's RTE "Prime Time" programme made for shocking viewing. It exposed the scandal of banks denying mortgage customers their contractual right to return to a tracker rate following a period of time on a fixed or variable rate. Customers have been forced to go through the banks' own internal appeal systems, the Financial Services Ombudsman, the Central Bank, and the courts system to vindicate their rights. If they finally win the argument to be returned to a tracker rate, many of them are not being given the original tracker rate but a much inflated one which is sometimes between 3% and 4% higher than the original tracker rate.

As the Tánaiste knows, the only variable element of a tracker mortgage rate is the ECB base rate. The margin should remain constant. "Prime Time" featured a customer who successfully fought Permanent TSB all the way to the High Court. He has now been given what can only be described as a ridiculous tracker rate costing him hundreds of euro extra each month in additional interest payments. In that case alone, Permanent TSB stands accused of failing to honour the terms of the original tracker mortgage contract by significantly hiking the margin it charges, quoting the customer a margin of up to 3.35% instead of the original 1.1% above the ECB rate. This cannot be dismissed as a legacy issue from another era because it is happening here and now. Indeed, it is not an isolated case.

Very serious issues were also raised in the "Prime Time" programme concerning practices at AIB and Bank of Ireland. One AIB customer whose case was profiled was eventually, after a battle, returned to a tracker rate with a margin of just under 4%. We already know that up to 300,000 variable rate mortgage customers are being ripped off by their banks. We now know that many tracker customers are being denied the right to return to a rate to which they are contractually entitled. We have known for some time that in some cases banks are determined to do whatever it takes to get people off tracker mortgage rates.

Yes.

There is a widespread suspicion that banks have been using subtle tactics, and in some cases not so subtle tactics, in recent years to nudge customers off the tracker rate they are entitled to. The banks have no fear of the Central Bank on this issue and that is the sad reality. They are not afraid of a slap on the wrist. The truth is that the Central Bank has been examining this issue since 2010. If the Government wants banks to sit up and take notice of this issue, it needs to talk the language they understand, which is that heads will roll at a senior level if such consumer issues are not being dealt with-----

Fire them.

-----fines will be imposed which will hurt them, and additional capital requirements will be imposed on financial institutions that breach the consumer code of conduct and where consumer rights are not being protected. Is the Government going to stand idly by and allow this practice to continue?

It has.

What is the Government going to do to end this scandal which is being perpetrated on an unknown number of customers who are being denied their contractual rights?

First, I express my full sympathy for individuals and families who have had this negative and at times extremely stressful experience of dealing with banks, including negotiations, the time it takes, and the various levels people have had to go through.

The Deputy is probably aware that the Money Advice & Budgeting Service, MABS, is one of the advisory services available to the public through the resources of the Department of Social Protection. It helps in situations like those outlined by the Deputy. It can be very difficult for those involved because while we have the Financial Services Ombudsman, the actual examination of various issues in cases can take a great deal of time. I would certainly like to see an improved and expanded service from the Financial Services Ombudsman. This is one way in which this particular situation would be assisted.

The Deputy said it is not a legacy issue, but the actual experience-----

Here we go.

You cannot get away from it.

Listen to the truth.

She has the shovel now. Let her dig.

Please.

However, the actual experience of this problem does relate to the collapse of the banks.

No.

Yes, it does. Let me finish. I did not interrupt the Deputy at all. The consequences of the crash have been very simple. The actual powers of the Central Bank and of the regulatory authority as well as the independence of the Central Bank as an institution have been strengthened significantly to ensure for everybody's sake that we will never see a banking crash again.

The Deputy asked a number of questions. I do not know whether he is implicitly proposing in the question that it would be better to remove the independence of the Central Bank and that the Minister for Finance, Deputy Noonan, would make direct decisions in this case. As the Deputy knows, the general regulatory structure that has been adopted in Ireland and around the European Union is to seek to have a strong independent regulatory authority as well as having strong consumer protection.

I share the Deputy's concerns both in terms of cases I am aware of and those I have read about in the newspapers. The banks have been dealing quite well and fairly with a number of cases. However, I do not have the overall picture. I know that some people have got settlements from different banks which they have been satisfied with.

Very few.

These include the banks the Deputy has mentioned. If we are having a serious discussion about this, we need to look at the different elements of the problem. Is the Deputy suggesting that somehow or other we should move away from the independence of the Central Bank, but not from dialogue with the Central Bank or requiring it to act both in terms of the security of the banking system and also customer protection?

It is the directors of the bank.

That is the balance we have to achieve concerning this matter. In the context of where we have come from, it is absolutely a legacy issue. It is also a legacy issue for all of the European banking system where we have a properly independent regulatory structure.

If Deputy McGrath is suggesting that the Minister for Finance should personally regulate the Central Bank, I do not agree with him on that. That is what led us down the road of difficulty in the past. What I am saying to the Deputy is that the consumer side of the regulatory structure, in my view, certainly does need to be improved. As Deputy McGrath is aware, the Central Bank is undertaking an examination of this area. When we have the results of that examination-----

What year?

Today marks the first day in office of the new Governor of the Central Bank, who is properly independent in the exercise of his functions to protect the system and customers.

The Tánaiste is waffling.

If the examination shows - and I hope it will - that more protection is required, then I absolutely believe that.

Deputy Michael McGrath is next. Can we have order, please?

The bottom line is that the sanctions available to the Central Bank are not strong enough. That is the issue we need to deal with. The banks are not afraid of the possible sanctions that the Central Bank can impose. It is a function of this House and of the Executive to bring forward proposals to deal with that. Since 2010 the Central Bank has been trying to deal with this issue. Customers, who should be protected, have been utterly frustrated at having to go through the internal system within the banks, the Financial Services Ombudsman, the Central Bank's consumer protection division and the High Court.

They are being gouged.

Permanent TSB went to the steps of the Supreme Court in this land to deny customers their contractual rights. How can an ordinary family deal with that situation? It is simply not fair. What we are dealing with here is a scandal. We need more than sympathy from Government. The individuals and families affected on a day-to-day basis by this issue need action to help them to deal with it.

What we are suggesting is that there is a need for stronger legislation to sanction the banks where clear breaches of the consumer protection code are taking place. It is evident that the sanctions that have been applied have not worked. When something does not work, then the Government has to step it up a level. That is clearly what needs to be done.

I welcome the examination that the Central Bank is doing of the broader issue of how customers on tracker mortgages have been dealt with. However, even if those involved find serious and fundamental problems with how banks have dealt with customers on tracker mortgages and in respect of their rights, I do not have confidence that the Central Bank has the capacity to deal with that. The evidence, unfortunately, is to the contrary. The Government needs to ensure that where there are cases in the system of banks seeking to repossess properties or disputes about the contractual rights of customers to a certain interest rate, then those cases should be halted immediately. The Government also needs to deal with the necessary reform of the Financial Services Ombudsman. There is a six-year rule at present, as the Tánaiste is aware, such that complaints can only be taken in respect of a matter that originated within the past six years. For many customers, that door is closing, if it has not already closed.

It is closed. It is gone.

They will be denied the right to any recourse. That is simply not acceptable.

Thank you, Deputy. I have to call the Tánaiste.

We also have a series of public interest directors in the banks, whom the Minister for Finance should be talking to. They should be asking questions on behalf of the State and customers in respect of what the banks are doing. There are a number of examples of what can be done. The Central Bank and the Government need to speak the language that the banks understand, because they have not understood so far.

Deputy, you are over time.

If it means that, in order to protect consumers, heads have to roll or far more serious fines have to be imposed-----

That will not happen.

If it means additional capital requirements have to be put in place in respect of banks, where they are clearly breaching the rights of consumers, then so be it. The Government will find support on this side of the House to achieve that.

I thank Deputy McGrath for his comments. The Department of Social Protection, my Department, actually has two services, the Citizens' Information Board and the Money Advice and Budgeting Service. We deal with some of these difficulties in terms of helping families who have problems. In fact, we have recently introduced a court mentoring service for people who have other mortgage difficulties and are going before the courts. The idea is to give people assistance when they need it.

That is a broader issue.

What I am saying to Deputy McGrath in respect of this matter is that we set up a structure, in light of some of the lessons learned about the banking crash, such that we have a strongly independent Central Bank that is not at the whim of any politician.

That structure has been established on a Europe-wide basis to avoid banking crashes. At the moment, the Central Bank is actually undertaking an examination of this particular area. Those involved have not given an actual date for when they are going to report, but, as I understand it, they have been in contact with the different institutions and people who have been affected by the kinds of distressing stories that Deputy McGrath has mentioned in the House. I do not have an exact date for when they will report, but my understanding is that they will be coming back sometime around the middle of December. I hope that when we get their considered report and evaluation on this matter, any advice they give in respect of the further vindication of consumer rights relating to banking will be implemented. I am saying to Deputy McGrath, as I said in my earlier response, that the Financial Services Ombudsman services could be enhanced.

Deputy McGrath referred to capacity in the Central Bank. There are 1,400 people working in the Central Bank.

It is about powers.

They are now doing the evaluation.

They are paid salaries, but are they working?

I hope we will get the report by the middle of December, as has been suggested.

What is the Government going to do with it?

We will certainly be prepared to act on the recommendations.